Boots scraps staff bonus scheme for first time in 10 years despite profit rise - but promises directors won't get a bonus either

Boots has cancelled its annual staff bonus scheme for the first time in decades despite a year when its parent company’s reported tax bill fell by 98 per cent to just £2million.

Boots: Announced it is to scrap staff bonuses

The majority of the pharmacist’s 60,000 workers had been expecting to receive a bonus of up to 20 per cent of salary – but instead will be handed a ‘gesture of gratitude’ worth just 1 per cent.

Tearful staff were told yesterday afternoon that bonuses would not be paid because profits were not high enough – even though the company managed to keep paying bonuses during the downturn.

Profits at Boots UK rose 2.1 per cent to £830million on revenues that were up 2.2 per cent at £6.3billion.

The company confirmed the move and also stressed that no Boots directors, including managing director Simon Roberts, would receive bonuses either.

It came as parent company Alliance Boots’ reported tax bill fell from £96million to just £2million last year after it had a £120million tax credit.

Alliance Boots, which is has its headquarters in Switzerland and is backed by private equity firm KKR and US drugstore giant Walgreens, said this was an accounting quirk and insisted it paid £90million in UK corporation tax during the year.

Chief executive Stefano Pessina said: ‘We pay the tax we have to pay so we don’t have to justify what we do.’

One Boots employee who missed out on their expected bonus said: ‘It seems like the profit targets were incredibly high. Maybe Stefano’s got a new jet or the price of champagne has gone up.’